The investment plan aims to develop skilled workers that can play a key role in China's modernization drive, the ministry said.

From 2006 to 2010, China will allocate at least 2 billion yuan to develop 100 pilot polytechnic institutes, the MOE said, noting "this is the first time the central government has made such a massive investment in higher-level vocational training."

Starting from 2006, China will also set aside 800 million yuan annually for scholarships for 800,000 needy students.

"We trust that this investment plan will boost China's technical training sector and make it better serve social and economic development," said Wu Qidi, vice minister of education.

Currently, China has more than 1,100 technical training schools and institutes but both equipment and the quality of teaching are often inadequate, according to the MOE.

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